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I&M stopped from transferring properties auctioned over Sh1.5bn debt

I&M had asked the court to dismiss the case arguing that it was frivolous. FILE PHOTO | NMG 

I&M Bank has been stopped from transferring three properties belonging to a firm in Nairobi over an alleged debt of about Sh1.5 billion.

Highgrove Holdings Ltd, through lawyer Eddy Orinda, told the court that the bank had already sold two of the properties at Lower Kabete, which were used as a security, and was in the process of transferring them without proper valuation and a notice as required by law.

He said the bank had advertised a third property for sale as the case was pending.

Yesterday, High Court judge Wilfrida Okwany directed the bank not to transfer the properties and “that status quo suit properties to be maintained.”

Mr Orinda said no proper reconciliation of accounts has been done and his client believes that the bank had overcharged the loan facility.

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Documents filed in court showed that the bank advanced a loan to Highgrove that was secured by the three houses in Lower Kabete.

The firm’s manager, Kirit Kumar, stated in an affidavit that they had a good relationship with the bank until they failed to clear the amount borrowed.

Unless the bank, together with auctioneers, Garam Investments limited, are stopped, the property would be transferred for values below the market rates, Mr Kumar said.

I&M had asked the court to dismiss the case arguing that it was frivolous, and that although the properties had been sold, the buyers were yet to access them.

The bank said that the interest on the loan had always been charged at contractual rates and the claims that it had been charging illegal rates were unsubstantiated.

Andrew Muchina, an employee of the bank, had said in an affidavit that the company’s rights were extinguished at the fall of the hammer on May 28, when the auction was held.

Mr Muchina argued that Highgrove’s remedy lay in seeking damages, if it was found that the properties were sold below the market price.

The judge also directed that the transfer be stopped until after the matter is heard on June 19.

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